I’m not sure how material this is nor how much can be read into my anecdotal experience but similar to my wake up call when I realised that for a whole weekend I was seeing Guidewire payment devices everywhere in Singapore; on my current trip back to London - all I have been seeing by way of POS devices in small single outlet or pop up stores (think farmers market stalls in Borough Market or cafes in Maltby Street market or single establishment pubs), have been the iZettle devices for swipe, insert, or tap and pay type card transaction devices.
I don’t remember noticing iZettle last time I was back in the UK but if they really have taken the UK or Europe by storm, (I will be travelling in Switzerland and Italy over the next 2 weeks and will keep an eye out - perhaps Saul could do the same in France), then I would say this creates a strong competitive force for PayPal vs Square in these geographies and if PayPal can gain penetration in the US with the device then in Square’s home market too.
I always considered PayPal a consumer play and Square a merchant play and was happy to go with Square on that basis (as well as entertain a possible complimentary merger between the two) however with this acquisition, PayPal is definitely gunning for Square head on in a key merchant market.
Make of it what you will.
This is interesting. I actually walked away from Square’s conference call thinking they we’re going to become a true platform as they move into serving the underbanked/underserved consumers. Square started by serving merchants, but through data and research have identified consumers as a new market.
Square Cash, Cavier, Capital, Weebly, etc are products that will form a platform between consumers + merchants.
I think we can also throw Shop into the discussion. I don’t think this is a winner-take all discussion. If anything, I think this is a turning point in new Payments/banking/financial services (all these companies) vs old (traditional banks, credit cards, loan companies, ecommerce platforms, cash register vendors).
I think a “basket approach” between Paypal, Square, and Shopify might be worth considering. Unfortunately, that would grow my portfolio by a company (Paypal).
Something I’m thinking about…
What are the chances they eventually get into something like payday loans? Is that crazy?
For what it is worth, I’m based in the UK and have seen quite a few izettle and other merchant readers in small stores, haven’t yet come across a square reader.
I’m long sq since $26, but unsure about the UK upside. I don’t think they need the UK to be a great investment.
I agree with you regarding PayPal stepping into square’s turf with izettle, but as tchalla has said, the UK has been izettles turf for the last few years.
In London, every coffee shop and small retail business has used izettle. Last night I stayed in a bed and breakfast in Dorset that used izettle. I have been waiting for the izettle IPO for the past year! And then PayPal went ahead and bought it. Spoil sports!
The UK is izettles market. It can only be hurt by square and\or other competitors. Square only launched here a year ago and I’ve yet to see a single shop with it.
I imagine it’s all down to international expansion. With PayPal behind it, izettle can be more aggressive expanding into green fields abroad. For the time being I think the SAM is huge enough for them both to enjoy growth. Something to look out for
All good crowd sourced data points guys. I will keep a look out in Switzerland (Zurich) and Italy when I am over there to see what POS devices they operate with - mind you last time I was going through Zurich airport they were busy rolling out gold bar vending machines at the airport so not quite sure it’s a fair judge of Europe!
FWIW - I didn’t see any iZettle in Zurich, Basel, Como or Venice - all ingenico territory. So maybe it is just a London/Northern Europe thing.
…and FWIW after spending the last 8 days in Tokyo, I didn’t see any swipe/touch card reading POS devices other than PANASONIC, (although they looked a bit like Guidewire and iZettle type devices). Not unsurprising given the Galapagos phenomenon that is Japan but anyhow - I thought I’d share in case anyone is interested.